Insiders At Freeport-McMoRan Sold US$3.5m In Stock, Alluding To Potential Weakness

Over the past year, many Freeport-McMoRan Inc. (NYSE:FCX) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Freeport-McMoRan

The Last 12 Months Of Insider Transactions At Freeport-McMoRan

In the last twelve months, the biggest single sale by an insider was when the Chairman, Richard Adkerson, sold US$2.8m worth of shares at a price of US$50.78 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$38.50). So it may not shed much light on insider confidence at current levels.

In the last year Freeport-McMoRan insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Freeport-McMoRan Have Sold Stock Recently

The last quarter saw substantial insider selling of Freeport-McMoRan shares. Specifically, Executive VP & CFO Maree Robertson ditched US$584k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Freeport-McMoRan Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Freeport-McMoRan insiders own 0.5% of the company, worth about US$269m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Freeport-McMoRan Insiders?

An insider hasn't bought Freeport-McMoRan stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But it is good to see that Freeport-McMoRan is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with Freeport-McMoRan and understanding this should be part of your investment process.

Of course Freeport-McMoRan may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.